Beer distributors conduct on-the-ground sales and marketing for the brewer and sell the beer to retailers. Beer is a perishable product, and distributors preserve beer by utilizing state-of-the-art, temperature-controlled warehouses and transportation systems.
After delivery, beer distributors monitor retailer shelves, taps and keg lines to ensure consumers are receiving the freshest product. While providing choice and value to retailers and consumers, beer distributors work simultaneously with state regulators to ensure accountability of these unique products and an orderly marketplace. Distributors are not permitted to purchase shelf space or exclusivity, furnish equipment, offer loans or offer discriminatory promotional pricing. Distributors must maintain refrigerated warehouses to store the beer and fleets of trucks to ship the beer throughout their territories.
Distributors argue the three-tier system benefits small producers since all brewers are required to go through an independent distributor and individual distributors can get many beers into the retail marketplace at once to provide a diverse selection.
Although the system has been in place for over 70 years, the three-tier system is not without its detractors who argue that the three-tier system interferes with efficient distribution, unnecessarily inflates beer prices and may violate international free trade agreements. Small brewers claim that the rules that govern beer distribution should be relaxed to allow more self-distribution exceptions for small brewers. Distributors are also threatened by another potential retail option for beer sales that could benefit consumers —the Internet. At a time when 36 states allow direct sales of wine on the Internet, most states still prohibit direct online sales of beer, to the distributor’s advantage That means that most small brewers aren’t able to sell their beer beyond a small region.